A Company v X
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell DBE,Mrs Justice O'Farrell |
| Judgment Date | 03 April 2020 |
| Neutral Citation | [2020] EWHC 809 (TCC) |
| Date | 03 April 2020 |
| Docket Number | HT-2020-000112 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2020] EWHC 809 (TCC)
Mrs Justice O'Farrell DBE
HT-2020-000112
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
IN PRIVATE
Rolls Building
London, EC4A 1NL
Roger Stewart QC and Shail Patel (instructed by King & Spalding LLP) for the Claimant
Anneliese Day QC and Max Evans (by licensed access) for the Defendants
Hearing date: 31 st March 2020
Approved Judgment
This hearing has been held in private because it is necessary to do so to secure the proper administration of justice. The application concerns two ongoing arbitrations. As such it raises issues of confidentiality, not just of the parties before the Court but also of others who are not parties to the claim and therefore not before the Court.
The matter before the Court is an application by the claimant, for the continuation of the injunction granted by the Court on 23 March 2020, restraining the defendants from acting as experts for a third party in ICC arbitration proceedings against the claimant.
Background
The claimant is the developer of a petrochemical plant (“the Project”).
In 2012 the claimant became the employer/owner in respect of the following three agreements with third party group companies in connection with the Project:
i) a contract with one of the companies for engineering, procurement and construction management (“EPCM”) services;
ii) a contract with another company for EPCM services;
iii) a parent company guarantee and co-ordination deed, pursuant to which the parent company guaranteed the performance of the other third party companies under the terms of their EPCM agreements.
In 2013 the claimant entered into two contracts with a contractor, Contract Package A and Contract Package B, for the construction of facilities in connection with the Project.
Disputes arose between the contractor and the claimant concerning delays to the Package A and Package B works. The contractor commenced ICC arbitration proceedings against the claimant, seated in London with an English choice of law clause (“the Works Package Arbitration”). In the Works Package Arbitration, the contractor claims additional costs incurred by reason of delays to its works, including the late release of Issued For Construction (“IFC”) drawings.
The IFC drawings were produced by the third party pursuant to its EPCM agreements with the claimant. The claimant's position is that if, and to the extent that, it is liable to pay additional sums to the contractor under the Package A and Package B contracts as a result of the third party's late issue of the IFC drawings, the claimant will seek to pass on those claims to the third party.
The claimant approached the first defendant, based in Asia, with a view to engaging it to provide expert services and on 15 March 2019 they signed a confidentiality agreement.
Under the confidentiality agreement, the first defendant agreed to:
“(a) hold all Confidential Information in strict confidence and shall in any case protect such Confidential Information with no less diligence than that with which it protects its own confidential or proprietary information;
(b) take all precautions to ensure that the secrecy of the Confidential Information is preserved among its employees, agents and representatives …”
‘Confidential Information’ was defined as:
“any information in possession of [the solicitors] relating to its representation of its client that is disclosed to [the first defendant] or that [the first defendant] otherwise obtains in connection with its engagement for the provision of expert witness services.”
It is common ground that the confidentiality agreement is subject to the laws of England and Wales and contains an exclusive jurisdiction clause for disputes or claims to be dealt with in the court of the Abu Dhabi Global Market.
By letter dated 13 May 2019 the claimant engaged the first defendant to provide expert services in connection with the Works Package Arbitration. The letter was signed by both parties and included the following:
“[The claimant] is pleased to confirm that it would like to engage you as an expert witness in the arbitration referenced above.
Your work on this engagement is to be performed at the direction of our legal representatives in this matter [J]. [J] shall issue to you a letter of instruction shortly….
… your scope of works comprises the following:
• Familiarise yourself with the Project and the reference materials that [J or the claimant] will send to you from time to time;
• Propose a fit-for-purpose methodology for the determination of the delays to the Works under each of Package A and Package B;
• Identify and analyse each of the delay events that gave rise to delays to the Works, allocate a delay period to each delay event, and calculate the total delay under each of Package A and Package B;
• Identify and analyse the root cause for the delays;
• Reflect your opinions and analysis in a report;
• Meet with [the contractor's] expert to the extent directed by the Tribunal and prepare any joint statements that may be required;
• Provide ad-hoc support to [the claimant] and its professional team in the arbitration; and
• Give oral evidence at the hearing.
…
You acknowledge that you are bound by the terms of the Non-Disclosure Agreement dated 15 March 2019 appended to this letter. You agree that you will treat all information, facts, matters, documents and all other materials that come to your attention as a result of this engagement as confidential (except insofar as you have to refer to them when setting out the substance of your instructions in your report).
…
[The claimant] is engaging you to provide expert services, led by [K]. It is agreed that [K] shall retain full responsibility for the work products for the duration of this engagement. In particular, [K] shall be responsible for the accuracy of the report and [K] shall be the testifying expert at the hearing.
You confirm that the work which is carried out in relation to this engagement will be [K's] own and will not be delegated or subcontracted to someone else. Where it is necessary or will be more cost effective to delegate some aspects of the work, you will inform [J], with copy to [the claimant], before involving anybody else, which aspects of the work are likely to be delegated, to whom they are likely to be delegated, their experience and their charge out rates. You agree that [K] will supervise and review all work carried out by others and take full responsibility for the end product, including the report.
You have confirmed you have no conflict of interest in acting for [the claimant] in this engagement. You will maintain this position for the duration of your engagement.”
The claimant's instructions to the first defendant were set out in a formal letter of instruction from J on 26 May 2019. K and his team in Asia started work on the Works Package Arbitration from about June 2019. The first defendant has invoiced a total of USD 700,000 approximately in respect of work connected with the Works Package Arbitration.
In the summer of 2019 the third party commenced ICC arbitration proceedings against the claimant, seated in London with an English choice of law clause (“the EPCM Arbitration”). In the EPCM Arbitration, the third party claims sums due and owing under the EPCM agreements. The claimant has brought counterclaims against the third party in respect of delay and disruption to the Project, including any additional sums payable by the claimant to the contractor caused by the third party's alleged failure to manage and supervise the contractor.
In about October 2019 the defendants were approached by the third party to provide quantum and delay expert services in connection with the EPCM Arbitration. K sent an email to J, stating:
“Our firm has received enquiry from lawyers representing [the third party] on its potential dispute against [the claimant]. They have asked for quantum and delay experts (outside Asia) to assist them on the matter and have requested us to run a conflict check in relation to the same.
We have informed them that we (in Asia) are currently engaged by [the claimant] on a separate dispute on the same project (without revealing any further details) and they do not seem to consider it as a conflict. We told them that we would be speaking to you regarding the same as well.
Since [the third party's] contract with [the claimant] is for EP and CM works for the full complex, and our engagement is in relation to the evaluation of delays on the construction subcontract for non-process buildings, our view is that working on the two matters (in different offices) would not constitute a “strict” legal conflict. Our firm also has the ability to set the engagements up in a manner that there is the required physical and electronic separation between the teams.
I was hoping to have a chat regarding this. Would you be available anytime today?”
Later that day, a telephone conversation took place between K of the first defendant and a solicitor at J, during which the solicitor stated that he considered that there would be a conflict if the defendants accepted the third party instructions.
The next day K sent an email stating:
“We've had an internal discussion at length and do not consider it to be a true conflict. I can explain more on a phone call, if need be.”
There was no further discussion of the issue, by telephone or in correspondence.
In February 2020 discussions took place...
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